Greek SOS: COVID-19 Pandemic Sinking Economy Deep

February 22, 2021

ATHENS – Now in a third tightened lockdown, the cost of trying to contain the COVID-19 pandemic is costing Greece as much as 1 billion euros ($1.21 billion) a month, or more than 3.33 million euros ($4.03 million) a day.

Non-essential businesses have been closed more than half of the previous year and show no signs of reopening for some time, costing lost tax revenues, while there are fears half the restaurants, bars and taverns won’t survive.

At the same time the New Democracy government isn’t taking in money it is pouring it out in subsidies to laid-off workers, shut down businesses and paying part of the rent for businesses, more than 17.5 billion euros ($21.19 billion) in 2020.

While there’s been no report on what’s being done with 32 billion euros ($38.74 billion) in European Union loans and grants, the Finance Ministry reported the state is bleeding money, cutting into its ability to prop up a battered economy much longer.

“Every month that retail is closed about 0.7% of Gross Domestic Product is added to the primary budget surplus,” a senior ministry official not named told Kathimerini. “How much longer can this go on?”

January figures showed the deficit growing by 500 million euros ($605.32 million) but when adding in the cost of worker subsidies to be paid later it comes to about 1 billion euros ($1.21 billion,) which is unsustainable.

By the end of February the cost of the pandemic will rise by 1.4 percent of the GDP, another big hit for a 2021 budget whose expectations of hoped-for minimal growth are fast coming apart.

While the government is counting on a slow vaccination campaign to right the ship, it’s coming later than designed and bringing worry that the spring and summer tourism season devastated in 2020 will be off again this year.

The budget was drafted on the assumption of tourism bringing in 60 percent of 2019 record figures, the paper said, but that has dropped to 40 percent with anxiety it could fall again unless international air travel picks up.

Greece’s tourism ministry said people will be allowed in even from hard-hit countries such as the United States and United Kingdom if they can show proof of vaccination or a negative Coronavirus test.

The ministry now is said to be working on a reduced budget plan for 2022-25 with fear the pandemic’s effect will last for at least several years and uncertainty whether more lockdowns would be coming if the vaccinations don’t bring a big drop in cases at some point.


ATHENS - If the Bank of Greece did not operate under the protection of the institutional framework of independence, after what happened in 2015, the country would have perhaps left the eurozone, Bank of Greece (BoG) governor, Yannis Stournaras, said on Saturday during the Kathimerini conference in a panel titled: "In the next 50 years, is Democracy safe?" Is Greece reformable?" "Who doubts that if it wasn't for the Bank of Greece, we might not be in the euro after the adventure of 2015?" he said.

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